Supreme Court: In a civil appeal arising out of special leave petition (SLP) concerning compensation under the Motor Vehicles Act, 1988 (Motor Vehicles Act) where the deceased, who had last travelled in the appellant’s car, was later found murdered, the Division Bench of Sanjay Karol* and Augustine George Masih, JJ., set aside the impugned judgments of the Motor Accident Claims Tribunal (Tribunal) awarding compensation and High Court affirming the same, holding that deceased’s death did not arise out of the use of the motor vehicle within the meaning of the Motor Vehicles Act. Consequently, neither the owner nor the insurer incurred liability to pay compensation under the Act.
The Court held that a claim under Sections 165 and 166, Motor Vehicles Act is maintainable only where the claimant establishes a causal nexus between the injury or death and the use of the motor vehicle. Although the expression “arising out of” receives a broad interpretation and compensation proceedings are governed by the standard of preponderance of probabilities, the existence of “some link whatsoever between the car, and the death has to be established”. Mere presence or involvement of a vehicle in the chain of circumstances, without evidence linking the use of the vehicle to the injury, is insufficient to attract statutory liability under the Act.
Brief Facts
On 29 November 2009, the deceased travelled in a vehicle driven by the appellant. 3 days later, deceased’s body was recovered near Binjkot Village in Chhattisgarh. His wife lodged an FIR alleging that appellant and 2 others had conspired to kidnap and murder the deceased.
The appellant was convicted by the Sessions Court for offences under Sections 365, 302, 201 and 120-B, Penal Code, 1860. However, the High Court acquitted him after finding that the prosecution had failed to establish the “last seen” theory, which formed the foundation of the prosecution case.
Independently of the criminal proceedings, deceased’s widow and children instituted a compensation claim petition under Section 166, Motor Vehicles Act, 1988 before the Tribunal. It was asserted that the deceased had been murdered inside appellant’s vehicle and that the vehicle had been used in the commission of the offence. The Tribunal, although holding that rashness and negligence were not proved, concluded that the death nevertheless arose out of the use of the motor vehicle and awarded compensation of ₹5,64,000 with interest. The High Court affirmed that conclusion and enhanced the compensation to ₹8,60,832.
The appellant challenged the impugned award before the Supreme Court.
Issue for Determination
Whether deceased’s death could be said to have “arisen out of the use of a motor vehicle” so as to attract liability under Sections 165 and 166, Motor Vehicles Act?
Analysis
The Court stated that for liability under the Motor Vehicles Act, there must exist a causal relationship between the accident or death and the use of the motor vehicle. It observed that the expression “arising out of” undoubtedly has a broader meaning than “caused by”, but the statutory requirement is not satisfied merely because a motor vehicle appears somewhere in the chain of events.
Referring to Bruhat Bangalore Mahanagara Palike v. K.K. Umesh Kumar, 2026 SCC OnLine SC 1111 and other precedents, wherein it was reiterated that the expression “arising out of” is wider than “caused by”, requiring a relationship that is less proximate but nevertheless real and demonstrable.
The Court emphasised that liability under the Motor Vehicles Act depends upon establishing a causal connection between the use of the vehicle and the injury. It stated that “ ‘Arising out of’ is the causal link. Without this, liability falls.”
The Court examined the evidence and found no material establishing that the deceased suffered fatal injuries inside the vehicle. The assumption made by the Tribunal and affirmed by the High Court lacked evidentiary support. No forensic material such as blood, hair, skin cells or other physical evidence had been recovered from the vehicle. There was no allegation that the vehicle had met with any collision or accident. The medical evidence merely indicated injuries caused by hard and blunt objects without connecting those injuries to the use of the vehicle.
The Court also distinguished the principle laid down in Rita Devi v. New India Assurance Co. Ltd., (2000) 5 SCC 113. In that case, the murder occurred in furtherance of the theft of the vehicle and therefore bore a direct relationship with the use of the vehicle itself. The present case was fundamentally different because the alleged murder was not shown to have been committed in connection with the use of the vehicle.
While reiterating that proceedings under the Motor Vehicles Act are decided on the basis of preponderance of probabilities rather than proof beyond reasonable doubt, the Court held that even this lower evidentiary standard was not satisfied. The available evidence did not establish the necessary nexus between deceased’s death and the use of appellant’s car.
“There is an alleged accidental murder and there is a motor vehicle, but the relationship between the two specifically involving a motor vehicle has not been established.”
Decision
The Court allowed the appeals and set aside the impugned judgments of both the Tribunal and the High Court, holding that deceased’s death did not arise out of the use of the motor vehicle within the meaning of the Motor Vehicles Act. Consequently, neither the owner nor the insurer incurred liability to pay compensation under the Act.
However, considering the peculiar facts of the case, the Court directed that if the compensation had already been paid to the claimants, no recovery should be effected from them.
Also Read: Govt. updates Hit and Run Victim Compensation Scheme to Simplify Claims
[Dilip Agarwal v. Rajshri Agarwal, 2026 SCC OnLine SC 1374, decided on 22-7-2026]
*Judgment Authored by Justice Sanjay Karol
Advocates who appeared in this case:
For the Appellant: Dr. Rajesh Pandey, Sr. Adv., Ms. Ayushi Pandey, Adv., Mr. Niranjan Marde, Adv., Ms. Shruti Pandey, Adv., Ms. Aswathi M.K., AOR
For the Respondent: Mr. Rakesh Kumar Singh, AOR, Mr. Rajnish Kumar Singh, Adv., Mr. Bhupendra Singh, Adv., Mr. Binod Kumar Singh, Adv., Mr. Ashok Anand, Adv., Mr. K.V. Alok Shankeran, Adv.
